"Can you turn that off for two seconds?" Sam Nazarian bounds down onto the floor of what will soon be his 27,000-foot nightclub and asks a guy with a neon vest and circular saw to take five.
The glory days of this spot--formerly the Sahara, a Rat Pack hangout on the north end of the Las Vegas Strip--are a distant memory. Though the complex is in the last stages of a $415 million renovation, the old theater, where we stand now on a blistering late-spring morning, still has a long way to go. The floor is bare concrete, the walls are covered in scaffolding, and the place smells like burnt steel and a Porta-John. Nazarian, sweating profusely, a white hard hat sitting uncertainly atop his 6-foot-4-inch, 250-pound-or-so frame, introduces the club. "This," he says, "is Life."
In just three months, on August 23, Life will open as the centerpiece of Nazarian's new SLS Hotel and Casino. It's where rowdy bachelorettes and drunk conventioneers will buy $1,000 bottles of champagne while aerialists perform overhead. Las Vegas remains a city built on gambling--and just outside the club's walls are hundreds of slot machines, waiting to be unwrapped and plugged in--but nightclubs have been gaining ground fast. With the rise of Internet gaming and the proliferation of Native American casinos, clubs now threaten to displace what has long been the city's most important industry.
Nazarian, 39, is a newcomer to Las Vegas, but he's already made a mark. Hyde Bellagio, the modest nightclub that he opened in 2011, reportedly earns more money per square foot than any club in the country, raking in more than $25 million a year in a 10,000-square-foot space, and it's just one of dozens of remarkably successful properties that Nazarian's company manages. Over the past decade, SBE--the initials stand for Samy Boy Entertainment--has grown from a small Los Angeles nightlife operation to one of the fastest-growing hospitality companies in America, with revenue of close to $500 million and a portfolio that includes five hotels, 14 clubs, 13 restaurants, and a couple dozen hip pizza parlors and fast-casual burger joints.
Nazarian has done all this thanks to the prudent deployment of his family's considerable fortune, as well as a knack--reminiscent of a top Hollywood producer--for being able to find brilliant creative types and turn their work into bankable products. There's the Bazaar, the high-end tapas chain headed up by James Beard Award–winning chef José Andrés. There's Katsuya, Nazarian's Nobu-like sushi spot that harnesses the talents of chef Katsuya Uechi at locations in Los Angeles, Miami, Kuwait, and Dubai. And there's Umami Burger, co-owned with restaurateur Adam Fleischman, which aims to do for burgers what Chipotle did for burritos. Nazarian's most important partner has been design legend Philippe Starck, who helped create the company's flagship hotel brand, SLS. The hotels, which attempt to approximate a hipper Four Seasons, can be found in L.A. and Miami, and will soon open in Shanghai, Philadelphia, Seattle, New York, and Vegas. "I love to work with Sam," says Starck. "I feel like I am the missing part of him and he is the missing part of me." The best movie producers have an instinctual sense of a great story; Nazarian has a nose for something he calls "flow," which is sort of like urban planning, but with glow sticks. Flow is the study of how nightclub revelers move and interact with one another. At Life, the flow will begin outside the nightclub, in the hotel's restaurants. A group of high-spending coworkers finishing up their dinner at Bazaar Meat--Andrés's new $150-a-head steak house--will be offered a table at the nightclub by a gorgeous VIP hostess, who will steer them past the line and into the party.
Whereas most Las Vegas nightclubs justify high bottle prices by bringing in star DJs and setting them up on stages, creating the effect (and the economics) of an arena show, Nazarian's approach is to shift the attention away from DJs. Life, like all of Nazarian's clubs, will feature up-and-coming performers and place them lower to the ground and closer to the action, so that the audience feels like they themselves are the show. And Nazarian's acrobats won't just be acrobats; they will also function as bottle-service attendants. Nazarian decided to use the theater's old catwalks to deliver Grey Goose from the rafters. "I don't think anybody does this anywhere in nightlife," he says. "And once you leave and go into the gaming area, the energy, the flow, will be the same."
Life, in other words, is not a stand-alone nightclub but a part of Nazarian's most ambitious project yet--a complex that includes two Andrés restaurants, a Katsuya, an Umami Burger, and a dozen other dining and nightclub concepts, all of which SBE operates. At 1,600 rooms, it is bigger than all of Nazarian's other hotels combined. It's a gamble, Nazarian realizes, and a counterintuitive strategy. "We're going back to how Vegas started, where one operator manages a whole building and the customer experience," he says. The largest hotel companies are, in essence, brand managers. Typically, a bank or private-equity firm provides the capital, a real estate developer constructs the building, a franchisee rents the rooms, and the bars, restaurants, and clubs are leased out to independent concessionaires. But Nazarian and his partners will attempt to control every aspect of SLS Las Vegas. If it works, he'll be the natural heir to Steve Wynn as the next great Vegas mogul--and maybe the next great American hotelier. And if it doesn't, he'll be yet another big dreamer ruined by this desert playground. "If you want to play in Vegas, you have to think bigger than everybody else," says Andrés. "Sam is going all in."
On most mornings over the past year, Nazarian has driven one of his many luxury cars--perhaps the souped-up Mercedes, or a Bentley or Ferrari--to the top level of the SLS Las Vegas's parking garage and looked out at his new hotel. Seven years ago, after a run of successful nightclub openings, he secured a loan and paid $288 million to buy this place. The plan had been to operate it for a year, shut it down, and renovate. But not long after the deal closed, financing for new projects began to dry up--a prelude to the 2008 recession that devastated this city--and Nazarian was unable to raise any additional capital.
That meant a guy known for models-and-bottles clubs was forced to operate a sort of low-rent theme park where the main attraction was the Nascar Café. "We had 6-pound burritos," Nazarian says, shaking his head. "That was our hook." He was finally able to secure a high- interest $300 million loan in 2011, which he used to buy out the old mortgage at a deep discount. The remainder of the financing for the renovation, which began in 2012, came from tapping the somewhat controversial EB-5 program, whereby foreign investors, most of them in China, put up at least $500,000 each in return for a green card.
Seeing the building today--and his prized possession: a 150-foot ultra-high-definition marquee--he can't help but be moved. "I remember coming here in 2006 as a 30-year-old and looking at that same view," he says. "To have all your best brands on the Las Vegas Strip, and to be able to show you can make a lot of money--I'm enjoying this."
Unfortunately for Nazarian, the rest of this part of Las Vegas Boulevard hasn't changed much in the past few years. Just south of his perch is the rusted skeleton of the Fontainebleau resort. The $2.9 billion, 68-story hotel has sat half-finished since 2009, like some third-world dictator's failed legacy project. Things are only slightly more encouraging to the north, where the main landmarks are the down-market Bonanza Gift Shop and the Stratosphere, where the rooms go for about $40 a night. Farther north is a collection of vacant lots, drive-through wedding chapels, boarded-up motels, and pawn shops.
But head past all that and things get interesting. Zappos CEO Tony Hsieh's Downtown Project--a collection of bars, restaurants, and art galleries near the shoe retailer's new headquarters--has sent rents soaring and helped spur the renovation of three hotels on Fremont Street. Hsieh, like everyone I spoke to in Las Vegas, is rooting for Nazarian's success in the hopes that it can spur development in the seedy middle ground between the Strip and downtown. "In the long term, they are going to be connected," says Hsieh.
Hsieh's project has thrived by appealing to people in their twenties and thirties, a group that has also flocked to the newest big hotel on the Strip, the Cosmopolitan. The $3.9 billion resort has a breathtaking lobby and a prominent ad campaign that promises "just the right amount of wrong." The hotel has been nearly full since it opened in 2010.
Surprisingly, the Cosmopolitan has been a financial disaster, largely because of the struggles of its gambling operation. To date, the casino has lost more than $420 million. This bodes ill for SLS, which will also have to stretch to fill its gaming floors and which occupies a far worse location on the Strip, making Cosmo-like revenue highly unlikely.
But Nazarian doesn't need to post such big numbers to turn a profit. The cost of buying and renovating the Sahara was less than a quarter of what was poured into the Cosmo. Nazarian notes that while Life is similar to Light, another Vegas hot spot, his budget was far less. "Our competitors can't believe how much we built for the money we spent," he says. "Our budget here is $7 million. Light's budget was [a lot more]. We're building a product that's equal in experience and, we think, has a better flow."
During the tour, Nazarian is continually pointing out ways that he and Starck cut costs. "Philippe's genius is in creating experiences with no money," Nazarian says, pointing at the sleek-looking coffered ceiling in Bazaar Meat. "It's not millwork," he says. "It's wallpaper."
Whereas the Cosmopolitan has a lobby the size of a European cathedral, the SLS's check-in area is modest and doubles as a bar. (This is one of Nazarian's tricks: minimize the square footage dedicated to anything that does not generate revenue.) And because Nazarian owns all the restaurants, he can force them to share kitchens, which makes them cheaper to build and operate and leaves more room for tables.
Later in the tour, as I admire the dark wooden exterior of the hotel gift shop, Nazarian flashes a puckish smile. "Wallpaper," he says.
Nazarian was born in Tehran, Iran, in 1975, the youngest of four children in a prominent Jewish family. The clan escaped to Israel just before the Iranian revolution and in 1979 moved to the United States, where his father, Younes, planned to seek legal remedies to reclaim his seized construction-equipment company. When that didn't work out, he borrowed enough money to purchase Standard Tool & Die, which makes industrial machinery, and along the way invested in a small tech company that merged with Qualcomm in 1988. His stake in the networking company would eventually be worth more than $1 billion.
Nazarian's older siblings grew up with a strong connection to Iranian culture and an acute understanding of the loss that they endured. Nazarian grew up American and rich. "In some ways he was like an only child," says his sister Sharon. "His experience of going to camp and of joining the baseball team--we didn't understand any of it." Nazarian's love of business, which he says came from "trying to assimilate," was apparent from an early age. When Sam was about 6 years old, he brought a pamphlet home from the family's Beverly Hills synagogue and attempted to sell it to the housekeeper. She played along and gave him a dollar. His brother David remembers Sam running up to him with the bill in his hand, crying, "'You can make money from anything!"
It's easy to see why Nazarian gravitated toward nightclubs, a money-for-nothing kind of business in which the right alchemy of crowd, buzz, and booze can persuade otherwise rational people to agree to several-thousand-dollar drink minimums. Nazarian learned the business while nominally enrolled at New York University. He joined a frat, partied hard, and rarely went to class, instead working as a promoter for the China Club on Manhattan's Upper West Side. Nazarian eventually dropped out and moved back to L.A. to start Platinum Wireless, a Nextel franchise. His parents were horrified, but Samy Boy--as he was known at the time--did well enough, eventually selling his 50% stake to Nextel for $1 million. In 2002, he opened his first club, Shelter.
Around the same time, Nazarian hired Starck, whose work Nazarian first encountered at the Delano hotel in Miami, which Starck renovated in 1994. "The first time I walked in it was, 'Wow, this is what I want to do,' " Nazarian says. "There was this energy. It was like a nightclub with rooms." Nazarian spent years courting Starck's agent and finally scored a meeting with the man himself in 2004. Starck was impressed by Nazarian's--SBE's main bankroller is Nazarian Enterprises, the family investment fund--and by his youth and ambition. "Immediately I fell in love," Starck says. "But everybody falls in love with Sam." Starck's previous patron, Ian Schrager, who launched Studio 54 and the Delano, among others, "was an absolute control freak," Starck says. "He wanted to see 20 prototypes of the same chair. Sam trusts more. He understands what you do. He checks, but he trusts."
Starck signed a deal to design a number of restaurants and nightclubs, which soon grew into a 15-year exclusive contract for hotels in North America and the Caribbean. The deal, says Nazarian, "gave us instant credibility." Bazaar chef Andrés told me he probably would never have taken the meeting with Nazarian if not for Starck.
By the mid 2000s, Nazarian was living large with four booming clubs, several trendy restaurants, and plans to open hotels in Beverly Hills and Miami's South Beach. He acquired 15 sports cars, a mansion previously owned by Jennifer Lopez, and a recurring role on The Hills--and generally acted like a rich twentysomething who owned a bunch of nightclubs. In an interview with The New Yorker, Nazarian noted that J.Lo had left her loofah behind in the bathroom. "I look at it every morning," he proclaimed. Nazarian also tried his hand at producing films, but projects such as the Ed Norton movie Down in the Valley didn't connect. "A couple of things on the movie side," Nazarian says, when I bring it up. "One. I realized I was really bad at it."
As this wry response suggests, Nazarian has grown up from his restive days and is now at pains to cast himself as a more serious person. "He was like a young, crazy dog," says Starck. "Now he's sort of a lion: strong, intelligent, serene." That may be true, but I often felt like Nazarian was auditioning for a different role--that of the jet-setting corporate executive. When we first sat down for an interview, in his L.A. office, Nazarian dropped the names of developers in the same way that, 10 years ago, he might have with celebrities, and his speech was so careful it often descended into corporate-speak. "Vegas is a huge milestone for us," he began. "It reflects many things: our innate ability--or our desire--to master-plan a property, taking old buildings and bringing them back to life and invigorating and injecting content. Which is what we are in many cases. We're a content company." It makes sense, but only kind of.
We talked like this for an hour and parted ways with a promise to rendezvous at the Sahara in two weeks. He canceled the day before our meeting and offered to see me the next week in Miami. But when I arrived, I was told he was about to hop on his Gulfstream V and head to New York. "He's in the middle of the biggest deal of his career," Nazarian's head of communications told me. "It's crazy."
It turned out that while I'd been chasing him around the country, Nazarian, who'd spent our first meeting talking about all the ways he would be able to beat the Cosmopolitan, had been trying to buy the same hotel with another investor. (The bid failed. "We ran out of money," he explains.) Nazarian had also been pursuing a deal to operate a new hotel in the Bahamas and was considering purchasing New York's London Hotel, where I finally tracked him down. "I've been trying to buy this place for half a year," he told me during the first of his three dinner meetings that night.
The Bahamas deal came through, and in May he announced that he would sell the land and buildings of both the SLS South Beach and SLS Beverly Hills to generate cash. By way of explanation, Nazarian told Bloomberg News that his company was adopting an "asset-light model" to free up funds for additional developments. It was the exact opposite of the own-the-whole-package strategy he'd been talking up in Las Vegas. At dinner, Nazarian explains that he's just trying to take advantage of a hot real estate market--that his ultimate goal is to take the company public in 2016 or 2017 while giving up as little equity as possible. He's been studying the career of Conrad Hilton--a man who, like Nazarian, stumbled into his empire. "He didn't want to be a hotelier," Nazarian says. "As strategic as people think these great companies were, it was really the relationships, being in the right place at the right time."
Nazarian often tries to play down the role that opportunism has had in his own career. During the early years of the SLS, he would say that the hotel's initials stood for "service, luxury, style," but the truth is that the name was a happy accident. One day he was in traffic behind a Mercedes sports car. Staring at the model number, SL500, which looked like SLS, Nazarian saw the name jumping out at him. "From a graphic-design perspective, it looked good," he recalls. "I said, 'I got the name!' "
Nazarian rarely tells this story, perhaps because it breaks the illusion of the hotel as a special place. But this kind of opportunism is its own brand of creativity. "I think that the reason Sam and I work well together is we don't work in a regular way," Starck says. "I never make architecture. I create a movie and I know exactly what people will do and see and feel--what memories will be imprinted. And Sam is the same. He has an incredible intuition."
The evening after Nazarian gives me the tour of his new hotel- casino, he and his longtime girlfriend, the model Emina Cunmulaj, host a party for local dignitaries at their home, 12 miles east in the hillside community of Summerlin. The mansion, which can only be accessed by passing through three successive security gates, is 14,000 square feet and features a view of the Strip, multiple swimming pools, a 25-foot waterfall, and--no joke--a 20-car garage. Scantily clad waitresses serve cocktails and amuse-bouches topped with caviar and gold leaf, as Nazarian works the crowd--which includes such Vegas luminaries as Elaine Wynn, ex-wife of Steve and cofounder of Wynn Resorts, and one of the daughters of Jay Sarno, who developed Caesars Palace in the 1960s. Nazarian, dressed in loafers and a linen jacket like some modern-day Gatsby, is uncharacteristically relaxed, sipping a cocktail and cracking jokes. "As long as you name the baby Sam, you're okay," he says to his events director, who recently told him that she is pregnant.
Toward the end of the evening, he hops up onto a terrace, puts his arm around Cunmulaj, and makes an impromptu speech. "I wanted to let you know that we'll be here for a long time," he tells the crowd. "And hopefully, we'll ride the legacies and the coattails of many of you who are here tonight." He steps down, lights a cigarette, and walks toward the edge of his property. Standing there, gazing out over the city, he can clearly see the SLS's gigantic marquee, glowing green on the other side of the valley. Nazarian fixes his eyes on it, takes a drag, and then--the moment of reflection passed--turns his attention back to the party to continue shaking people's hands.